Our latest disclosures  

Our most recent climate-related disclosures and performance data can be found in the BHP Climate Transition Action Plan 2024, BHP Annual Report 2024, Operating and Financial Review 6.9 - Climate change and BHP ESG Standards and Databook 2024.

Our value chain GHG emissions targets and goals

Our approach

Our strategy to support reduction of greenhouse gas (GHG) emissions in our value chain has four primary focus areas: 

1. Support the development and adoption of GHG emissions intensity reduction technologies in steelmaking 
2. Enhance the quality of the iron ore and steelmaking coal we produce 
3. Encourage direct suppliers to pursue net zero for their operational GHG emissions (Scopes 1 and 2 emissions) 
4. Support the development and adoption of GHG emission reduction technologies in shipping 

These focus areas have been set with consideration of the scale of GHG emissions in our value chain (the dominant source being from processing of our iron ore and steelmaking coal by our customers for steelmaking), the level of impact we can achieve with stakeholders and industry, as shown in the chart below, and the alignment to our portfolio strategy.

Steelmaking

We are technically and financially contributing to the development of technologies that can potentially provide a GHG emissions intensity reduction of at least 30 per cent relative to conventional blast furnace steelmaking. These technologies may be deployed either in isolation or in combination. While some of the technologies we are supporting have a potential GHG emissions intensity reduction exceeding 30 per cent, none has the commercial readiness and flexibility needed for widespread adoption today.

Drawing upon our in-house iron and steelmaking industry expertise, we have developed our steelmaking decarbonisation project program, as shown in the chart below. Our ambition is for multiple technology pathways to mature so that there are commercially feasible options available to steelmakers in different regions. 

The primary criteria we use to identify and prioritise projects for our program are: 

• Scale: The depth of GHG emission abatement that could be attained, how quickly it could be brought to readiness, and how broadly it could be adopted across the industry 
• Influence: Our capabilities and the leverage available to us to have a tangible impact on development and help enable the technology to be successfully propagated 
• Alignment: Relevance to our assets, our commodities and our customers, and the fit within the wider technology landscape

Our steelmaking decarbonisation program has four components: 

1. Collaborative partnerships and consortiums: We partner to develop and execute high-impact tests, trials, pilots and demonstrations that can be shared with steelmakers and are aligned with our conceptual steel decarbonisation framework. 
2. Research: We directly fund, produce and disseminate industry-leading research, collaborate with technology developers and support the establishment of cooperative research centres. 
3. BHP Ventures: We invest in early-stage technologies with breakthrough potential and participate in their development journey. 
4. Standardisation and transparency: We advocate for consolidated, robust sustainability and reporting standards that are fit-for-purpose and support transparency and traceability improvements in the value chain. 

Across all four areas, we regularly monitor the merits of technologies under development.

Iron ore and steelmaking coal quality 

The GHG emissions intensity of conventional blast furnace steelmaking can be reduced with higher quality iron ore and steelmaking coal. We anticipate that steelmakers will increasingly prefer higher quality raw materials as the steel sector decarbonises. We have increased the ratio of high grade lump ore that we produce through the recent development of our South Flank mine which completed its ramp up to full production capacity in FY2024. In recent years we have divested our interests in BHP Mitsubishi Coal and BHP Mitsubishi Alliance’s Blackwater and Daunia mines to high-grade our steelmaking coal portfolio. We are also assessing other options to enhance the quality of our product portfolio in a targeted manner, including:

• beneficiating (i.e. using physical processes to remove impurities from ore) our iron ores
• washing our steelmaking coals to reduce ash content
• supporting customers to pelletise our iron ores to improve steelmaking efficiency

Shipping

As one of the world’s largest dry bulk charterers, we play an important role in supporting the maritime industry to meet or exceed the GHG emission reduction ambitions set by the International Maritime Organisation (IMO). Our shipping medium-term goal, long-term net zero target and CY2030 commitment are generally consistent with or exceed the IMO’s CY2030 ambitions and CY2050 ambition, and therefore we expect to have a similar pathway as the sector. 

Our pathway will be accelerated directly by our actions and indirectly by the impact of our actions and influence in the industry. Our strategy to support our pathway encompasses three areas of focus: 

1. Efficiency improvements: Drive operational efficiency through vessel and voyage optimisation and technological energy efficiency improvements. Operational efficiency measures include consolidating parcel sizes to use larger and more efficient vessels and using alternative routes. Technological measures include chartering vessels with energy saving technologies such as vessels with premium hull coatings and wind-assisted propulsion, which we are trialling with Pan Pacific Copper and Norsepower. 
2. Lower GHG emission and low to zero GHG emission alternative fuels: Establish demand and incentivise industry uptake of lower GHG emission fuels and low to zero GHG emission fuels, such as our dual-fuelled LNG chartered vessels and biodiesel-fuelled voyages, respectively. We are also working across the ammonia value chain for the design and build of ammonia fuelled vessels, and supply of low to zero GHG emissions ammonia. 
3. Improve carbon accounting: Step change improvements in the completeness and accuracy of our carbon accounting through digitisation and automation in our value chain. This builds on our partnership with DNV and our use of their Veracity data platform for validation and reporting of shipping-related value chain GHG emissions since FY2022.

Direct suppliers

Each year we spend billions of dollars on goods and services from thousands of suppliers. Our strategy targets our top 500 suppliers by spend, which contributed to 78 per cent of our FY2024 total spend on suppliers. 

Our selective purchasing approach sets a commercial requirement that, over time, a supplier must actively reduce its operational GHG emissions and/or maintain a competitive level of GHG emissions intensity for their product or service. We expect that for contracts where we implement this, it will add commercial value for direct suppliers with robust plans and demonstrated performance improvement. We have also recently begun to incorporate new GHG emission reduction criteria into our supplier selection and tendering processes, including the setting of net zero targets and goals, the GHG emissions intensity of the goods and services being provided, or specific and relevant GHG emission reduction initiatives. We have seen a year-on-year increase in the proportion of our top 500 suppliers that have a target or goal aligned with our long-term net zero target for direct suppliers – from 27 per cent in FY2022, increasing during FY2023 and up to 78 per cent in FY2024. We also recognise selective purchasing will be a progressive strategy as many suppliers are still early in the journey towards setting and progressing towards their GHG emission reduction targets and goals. 

Our supportive engagements intend to identify, assess and pursue opportunities to partner with our direct suppliers to support their GHG emission reduction initiatives. 

Measurement and monitoring are essential to assessing performance against our long-term net zero target for direct suppliers. Our current calculation methodology for Scope 3 emissions reporting depends on industry averages. We plan to improve the accuracy of our Scope 3 emissions inventory reporting over time, noting there is currently a wide range of reporting capabilities among our suppliers. We have started to introduce contractual requirements for regular GHG emissions reporting by our suppliers that will help to build their measurement capability and improve our ability to report progress against our long-term net zero target for direct suppliers. We have also made incremental improvements in the calculation of this part of our reported Scope 3 emissions inventory, moving from spend-based emission factors to quantity-based measurement for certain supplied items.